Formulating the right specification for a social infrastructure PPP project is fundamental to the project's success. Interviewees identified cases where detailed specifications led to efficient delivery and smooth running of operations. As Victorian County Courts CEO, Neil Twist, describes:
"The contract shows great foresight, as it sets out in detail how the complex set of relationships between the Court and the business partners should be managed to ensure the smooth operation of the building."
To deliver appropriate standards, service providers require clearly defined output specifications when scoping the project. However, government agencies sometimes focus their limited resources on the facility design specification at the expense of the services specification. This can lead to services standards lacking strong links to measurable key performance indicators (KPIs). Without effective KPIs, payment mechanisms and abatement regimes are less effective at providing the incentives for the private sector to perform.
Project teams are addressing this issue by factoring in longer lead times to allow them to examine specifications thoroughly. The nature of some services means their specifications require greater detail and description for inputs rather than outputs. Government agencies need to determine a balance and avoid being too academic in their approach, as Johan Top, Senior Program Advisor, Victorian Department of Justice explains:
"We have limited flexibility in defining the security requirements for a prison facility. Relying soley on output based specifications could result in unintended outcomes."
John Rickard, Contract Director, Victorian Department of Primary Industries believes procurement can benefit from involving contract managers when finalising specifications and contractual arrangements. This would capture a higher level of practical detail in the contract, providing greater connection between the contract and the practicalities of the day-to-day operations. Some interviewees reported that procuring authorities are finding it hard to resource this requirement, due to the different nature of the skill sets required for transacting and contract management.